[Senate Report 116-313]
[From the U.S. Government Publishing Office]


                                                  Calendar No. 616

116th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 116-313

======================================================================
              STOP WASTEFUL SPENDING BY THE GOVERNMENT ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2722

    TO PROHIBIT AGENCIES FROM USING FEDERAL FUNDS FOR PUBLICITY OR 
              PROPAGANDA PURPOSES, AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               December 14, 2020.--Ordered to be printed              
                           
                                __________
                                  
               
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
                           WASHINGTON : 2020                     
          
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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
ROB PORTMAN, Ohio                    GARY C. PETERS, Michigan
RAND PAUL, Kentucky                  THOMAS R. CARPER, Delaware
JAMES LANKFORD, Oklahoma             MAGGIE HASSAN, New Hampshire
MITT ROMNEY, Utah                    KAMALA D. HARRIS, California
RICK SCOTT, Florida                  KYRSTEN SINEMA, Arizona
MICHAEL B. ENZI, Wyoming             JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri

                Gabrielle D'Adamo Singer, Staff Director
                   Joseph C. Folio III, Chief Counsel
            William W. Sacripanti, Professional Staff Member
               David M. Weinberg, Minority Staff Director
               Zachary I. Schram, Minority Chief Counsel
       Annika W. Christensen, Minority Professional Staff Member
                     Laura W. Kilbride, Chief Clerk
                     
               

                                                  Calendar No. 616

116th Congress}                                           { Report
                                 SENATE
  2d Session  }                                           { 116-313

======================================================================
 
              STOP WASTEFUL SPENDING BY THE GOVERNMENT ACT

                                _______
                                

               December 14, 2020.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 2722]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2722) to prohibit 
agencies from using Federal funds for publicity or propaganda 
purposes, and for other purposes, having considered the same, 
reports favorably thereon with an amendment (in the nature of a 
substitute) and recommends that the bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and the Need for Legislation..........................2
III. Legislative History..............................................3
 IV. Section-by-Section Analysis......................................3
  V. Evaluation of Regulatory Impact..................................3
 VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............5

                         I. PURPOSE AND SUMMARY

    The purpose of S. 2722, the Stop Wasteful Advertising by 
the Government Act (or the SWAG Act), is to prohibit agencies 
from using Federal funds for creating mascots or distributing 
tchotchkes commonly referred to as ``swag.'' Exceptions from 
these prohibitions include challenge coins, military medals, 
mascots specifically mentioned in legislation (such as Smokey 
the Bear) or used by the military (such as Chesty Puller, the 
U.S. Marine Corps bulldog), swag used for recruiting job hires, 
and items distributed for the 2020 Census.

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    The Federal Government spends over $1.4 billion annually on 
public relations campaigns and advertising.\1\ Investigations 
have revealed instances in which federal agencies spent amounts 
of these funds on frivolous promotional items, including 
$605,000 on coloring books,\2\ $60,000 on key chains\3\, 
$33,000 on snuggies (blankets with sleeves),\4\ $17,000 on 
koozies\5\ and $16,000 on fidget spinners.\6\ In Fiscal Year 
2018 and 2019, federal agencies spent approximately $250,000 on 
custom suits for mascots. Such spending is of indeterminate 
effectiveness at best and possibly represents a fruitless 
expenditure of taxpayer funds.\7\
---------------------------------------------------------------------------
    \1\Total Cost tabulated by adding the annual advertising 
expenditure as reported by GAO and the salaries of Federal workers in 
public relations jobs as reported by GAO. See U.S. Gov't Accountability 
Off., GAO-16-877R, Reported Data on Related Federal Activities (2016).
    \2\See generally, USA Spending, http://www.usaspending.gov (last 
visited Mar. 25, 2020).
    \3\Id.
    \4\Arlington Virginia Dept. of Community Planning, Housing, & 
Development, Planning Division, Census Staff Report (2010), https://
projects.arlingtonva.us/wp-content/uploads/sites/31/2017/04/Census-
Staff-Report_2010.pdf.
    \5\See generally USA Spending, https://www.usaspending.gov/#/
keyword_search/koozie (last visited Mar. 25, 2020).
    \6\See generally, USA Spending, https://www.usaspending.gov/#/
award/37848623 (last visited Mar. 25, 2020), and USA Spending, https://
www.usaspending.gov/#/award/65454710 (last visited Mar. 25, 2020).
    \7\Staff Report of U.S. Sen. Joni Ernst, 116th Cong., `Boo!' To the 
Cost of the Capitol's Costumes, https://www.ernst.senate.gov/public/
_cache/files/6cadf7c5-14d2-40e7-9f19-bdd9d077735e/
5247EE3E066F4059C595CFA3E55DD71D.2019-10-29-october-squeal-mascot-
list-.pdf (last visited on March 25th, 2020).
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    Federal agencies also spent money on conducting 
questionable advertising campaigns. For example, the State 
Department spent $630,000 on two advertising campaigns in order 
to increase the number of ``fans''' of certain department-run 
Facebook pages targeting foreign audiences.\8\ As a result, the 
State Department Facebook pages in question rose from around 
100,000 fans to more than 2 million for each page.\9\ While 
this is a positive increase, there is little data on how 
effective this form of advertising is, and many within the 
Department criticized the move as ``buying fans''' and touting 
metrics that do not indicate any greater involvement or 
investment in the mission of the State Department.\10\
---------------------------------------------------------------------------
    \8\U.S. Dept. of State, Off. of Inspector General, ISP-I-13-28, 
Inspection of the Bureau of International Information Programs (2013).
    \9\Id.
    \10\Id.
---------------------------------------------------------------------------
    Additionally, there is limited transparency surrounding 
this type of spending. There is no central reporting mechanism 
by which congressional appropriators, inspectors general, and 
the public, can easily determine what is being spent on 
advertising and public relations including returns on 
investment and benefits to the taxpayer. Requiring agencies to 
disclose non-prohibited advertising spending could increase 
government transparency and oversight.
    The SWAG act addresses these concerns by prohibiting 
agencies and other government entities from spending federal 
funds to acquire or distribute ``swag,'' or products 
distributed at no cost, if the products do not support the 
agency's mission and do not have a positive return in achieving 
agency or program goals. The bill also requires each agency, as 
part of its annual budget justification, to report on its 
public relations and advertising spending for the preceding 
fiscal year, which may include an estimate of the return on 
investment for the agency.

                        III. LEGISLATIVE HISTORY

    Senator Joni Ernst introduced the Stop Wasteful Advertising 
by the Government Act on October 29, 2019, with Senators Rand 
Paul, Steve Daines, and Rick Scott. The bill was referred to 
the Senate Committee on Homeland Security and Governmental 
Affairs. The Committee considered S. 2722 at a business meeting 
on March 11, 2020.
    At the business meeting, Senator Johnson offered an 
amendment that took agency input into account, clarified 
spending prohibitions and exempted forms of spending, and made 
minor definitional clarifications and changes. The amendment 
also tasks the Office of Management and Budget (OMB) with 
issuing regulations on implementation of the bill within 180 
days of its enactment. The amendment was adopted en bloc by 
voice vote with Senators Johnson, Portman, Lankford, Romney, 
Scott, Enzi, Hawley, Peters, Carper, Hassan, Harris, Sinema, 
and Rosen present.
    S. 2722, as amended, was approved en bloc by voice vote 
with Senators Johnson, Portman, Lankford, Romney, Scott, Enzi, 
Hawley, Peters, Carper, Hassan, Harris, Sinema, and Rosen 
present.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section establishes the short title of the bill as the 
``Stop Wasteful Advertising by the Government Act of 2020'' or 
the ``SWAG Act.''

Section 2. Definitions

    This section defines the terms ``advertising,'' ``agency,'' 
``mascot,'' ``public relations,'' ``return on investment,'' and 
``swag.'' Also defined are certain exemptions such as military 
medals and challenge coins.

Section 3. Prohibitions; public relations and advertising spending

    This section prohibits an agency or other federal 
entityfrom using federal funds to purchase or otherwise acquire 
or distribute swag, or manufacture and use a mascot. This 
section also mandates that each agency shall submit to Congress 
a report on its spending on public relations and advertising 
spending as part of its annual budget justification. 
Additionally, this section lays out a series of exceptions to 
the prohibition, which include spending that supports the 
mission or objectives of the agency while generating a positive 
return on investment, supports recruitment for the armed forces 
or federal government, or supports conducting the census. 
Lastly, this section gives OMB 180 days from enactment to issue 
regulations to carry out the Act.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 8, 2020.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2722, the SWAG Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sofia Guo.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    S. 2722 would prohibit federal agencies from using federal 
funds to purchase, acquire or distribute swag, which the bill 
defines as tangible products or merchandise distributed at no 
cost with the sole purpose of advertising or promoting an 
agency, organization, or program. The bill would allow certain 
exceptions, including items that generate a positive return on 
investment to agencies or that are used for recruitment, and 
mascots related to the Armed Forces. Under S. 2722, each agency 
would be required to report on its spending for public 
relations and advertising for the previous fiscal year, and the 
Office of Management and Budget would be required to issue 
implementing regulations.
    CBO estimates that implementing the bill would have an 
insignificant net effect on spending subject to appropriation. 
Based on the cost of similar administrative activities, CBO 
expects that the new administrative and reporting requirements 
would cost less than $500,000. Because of the exceptions in the 
bill, CBO expects that any reduction in spending on swag and 
mascots would not be significant.
    Enacting S. 2722 could affect direct spending by some 
agencies that are allowed to use fees, receipts from the sale 
of goods, and other collections to cover operating costs. CBO 
estimates that any net changes in direct spending by those 
agencies would be negligible because most of them can adjust 
amounts collected to reflect changes in operating costs.
    The CBO staff contact for this estimate is Sofia Guo. The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Director 
of Budget Analysis.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because this legislation would not repeal or amend any 
provision of current law, it would not make changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.

                                  [all]